Why don't more people buy and rent out apartment complexes?

Question

The owners can pay for the mortage and other expenses and even pay somebody to take care of the maitenece and tenent complaints with say 1/2 of the rent payments and live off the other half. That's earning a living basically doing nothing but collecting rent.

Answer 1

Doing nothing but collecting rent is a full time job.

People move out. If they owe you money you have to collect it. You have to repair and clean it up to rent it to someone else. You have to advertise it. You have to screen tenants, and show it to them. You have to get contracts signed. You have to change locks and get keys made. You have to field complaints that their moving truck is blocking the whole parking lot. You have to collect rent every month. You have to keep people from disturbing each other. You have to evict people that won't pay or who disturb others. You have to pay the taxes and insurance. You have to get the yard cut.

Owning rental property isn't as easy as it looks. It's an occupation.

Answer 2

Oh, if it was only that easy!!!

Being a landlord is a lot of work. You have to be on call 24/7. You end up with deadbeat renters, no matter how well you did your background checks ahead of time.

Yoy can pay someone else to do the maintenance and tenant complaints, but that cuts into your profits. Plus you'll need a lawyer and an accountant to do your complex taxes.

Plus owning the complex will only be helpful as long as you can depreciate the property. And what if the value goes down on the real estate? You lose your shirt.

It's like the old cliche: if it looks too good to be true, it probably is!

Answer 3

More rentals are owned by individuals than by corporations

Answer 4

As a former landlady of over 20 years, I can honestly answer this one. While it may seem like easy money, the truth is, it is not for everybody. Some people get into it thinking it is and find out its not. Usually by encountering the tenant known as the "tenant from Hell", who refuses to pay, pays with bad checks, contacts the health department, or any other organization who can buttress their case for not paying a justified and agreed to rent, also, while not paying you, they are trashing YOUR property, being a nuisance to neighbors, and refusing to answer the door, sign for letters of eviction/court appearances, and not returning phone calls. While you are standing there, paying your mortgage, taxes, insurance, and your own bills and so on, you will have to dip in to your savings further to pay for your "deadbeat tenants" portion. Your taxes and insurance and mortgage payments continue, even if your tenants rent checks do not. The fact of the matter is, no matter how well you check some peoples references, no matter what great jobs they have, no matter what nice cars they drive, at some point, one of your beloved tenants will suffer some misfortune, either by their own stupidity or just simply in the course of natural life, and you will be the idiot holding the bag, while they deal with the transmission going on their car, their spouse leaving them, losing a job or getting sick, ditto on the kids, ditto on dogs you told them they couldn't have, and extra "guests" that move in, increasing the wear and tear on the carpeting, the plumbing, the paint and the doors you paid for and will pay for again and again while they wear and tear them. I have had wonderful tenants who cleaned up after themselves, kept the property neat and clean, no bother to anyone, including myself, and some who even made small improvements with my permission, of course, and who I hated to lose as tenants. But then.....the Tenants from Hell arrived, and while they looked great on paper and references checked out, drove nice cars, had nice clothes and so on, they were deadbeats the minute something in their life didn't pan out. I've had tenants who just from pure stupidity, didn't know or didn't care there was a $2.00 leak under the sink, and let it become a $6000 problem (subfloor had to be ripped up, cabinets removed and replaced, new subfloor, new flooring and new plumbing from one little dripping pea trap). Fact of the matter is, once that lesson was learned, I no longer waited to hear from a tenant if there was any problems (roof, plumbing, animals in attic or basement, or light malfunctioning, heat not working, a/c not coming on and so on). As a landlord, you are expected to hop to it when a complaint is given, and that can be a difficult thing. You are in the middle of opening presents Christmas morning and you get a call that your tenant with 3 children has no heat. Do you A. Say gee, I'm in the middle of something, for crying out loud, its Christmas morning, I'll get someone on Monday (its Saturday) to come take a look. B. Hold on family, my tenant and her chilldren are without heat, I must drop everything right now and go see what the problem is C. Tell your tenant her rent does not include weekend repairs, that she must pay for all repairs, that you don't deal with tenants on weekends.....blah blah blah......If you are a good landlord, you ask if she can wait for an hour (while her and her kids freeze on Christmas morning and yours are all nice and toasty) and you'll come right over and see if you can get it up and running (hope to God its a simple breaker) or that you will call the heating company you have on speed dial and try and get someone (even at weekend, holiday screw you rates) to come and take care of it. Best if you have someone you know and trust, that has no family, no life and willing to drop their remote to run and take care of your tenants on Christmas morning and works cheap....keep dreaming..... and while you are asking her ever so nice if she minds waiting an hour, pray she doesn't have the department on housing on speed dial or uses that hour to take pictures of her kids with icicles hanging off their noses to show the judge why she didn't pay rent for the next 6 months. Being a landlord entails having a bit of street smarts, an ability to walk a fine line between tenants that while in difficult circumstances (car transmission shot, lost job, etc) can still make their rents to you (I have assisted with information about where to go for additional help....churches, AFDC, Department of Housing and Rent assistance) so that a family need not be evicted just because their circumstances had deterioted. If they made attempts to minimize my losses, I would work with them, if not, I used court as a last resort. Honestly, no landlord wants to go to court unless they have to, the fact is, sometimes a tenant leaves you no choice but to recover possession of your property so you can rent to someone else. One tenant I had (6 kids) wife was an unpaid secretary at a church my brother belonged to, he had a good job, they were decent, sweet people, my brother even vouched for them. Moved in, he lost his job within 2 months, was late with the rent (I was happy getting it, even late) and then he got another, not as good job and struggled, the wife got sick, he had no insurance, the kids were struggling in school with Mom ill, and he was struggling with making his bills. We tried everything to help, but in the end, as he fell behind further and further, it was obvious he could not overcome the debt he was piling up. No one could dig them out of the hole that was opening wider and wider. My offer? Please move and leave the place clean and in decent shape and I will call it even and not chase you for the 3 1/2 months rent you owe me (was my Moms place, she was in an accident, unable to pay her own mortgage and living with me and we had rented her place so we could make the martgage payments). So before you think I was a stinker, I spent my Christmas money on making my Mom's mortgage payments when he did not. And while he promised and promised he would make it good, he never did, and probably couldn't. I did not want to evict this man, but my Moms financial situation was dire and we could not afford to cover the house payments with money we didn't have. The ending? He moved out, he left the house clean as a whistle, and I did not have to go to court, nor my bedridden Mother. If I had to, I assure you a judge would have looked at me, or my Mom, as having assets, certainly more than the tenant with 6 kids and a sick wife) and could have given them another 3-6 months of sympathy, while my Mother went into foreclosure and lost her home. WOW! My family did with no presents that year (his got theirs from the local church, while mine got a story about love and giving to others) and I made my Mom's house payments with our Christmas money. Choices no one wanted to make, but when you are a landlord, thems the choices you may have to. Think about it......